Changes in the pipeline for massive mining scheme following technical review

Mining giant Anglo American says it has completed a review of its Woodsmith polyhalite mine development on the North Yorkshire coast, to help optimise the project’s long-term value.

The business says the review has confirmed a number of elements of the project’s design would benefit from modification, to bring it up to the company’s own safety and operating integrity standards.

And the company says it is also making a change to the leadership of the mining development, ahead of the full project execution phase.

Tom McCulley, who has led the development of the Quellaveco copper project in Peru, will take over from Chris Fraser as CEO of Crop Nutrients.

After 12 years of driving the project from inception to its position today, Chris Fraser will step aside and take on a strategic projects role for Anglo American.

The Woodsmith mine involves the sinking of two mineshafts into the polyhalite ore over a mile beneath the surface near Whitby, and the construction of a 23-mile long tunnel to a new processing and shipping facility on Teesside.

When the mine is complete, extracted polyhalite ore will be shipped around the world and sold to farmers as a natural low carbon fertiliser, certified for organic use.

Anglo American says it has identified changes required to accommodate both increased production capacity and more efficient and scalable mining methods.

It says such improvements will also require the installation of additional ventilation earlier in the development of the underground mining area.

The business says these modifications to the mine’s infrastructure will result in a “different construction and production ramp-up schedule.”

Mark Cutifani, chief executive of Anglo American, said: “We are very happy with the high quality and exciting potential of Woodsmith, with the scale and quality of the polyhalite orebody pointing to a quarter one operating cost position and strong margins.

“This is a very long-life asset and we are going to take the necessary time to get every aspect of the design right to match our long term vision and value aspirations.

“We have said from the outset that we expect to make improvements and that we will execute certain elements of the construction differently and with a more conservative schedule.

“We expect to have completed our design engineering, capital budget and schedule at the end of 2022, with a fully optimised value case that recognises the upside potential we see in Woodsmith, and we will then submit the full project to the Board.”

In the meantime, construction of the major critical path elements of the project, principally the two main shafts and the mineral transport tunnel, is progressing, with approximately $0.7bn worth of capital expected to be invested in 2022.

Cutifani added: “We are enormously grateful to Chris Fraser for his founding vision over some 12 years in bringing Woodsmith to reality – a project with sustainability principles at the core of its design and in the product itself.

“His dedicated leadership in progressing the project this far and integrating it into our organisation, and doing so while making considerable construction progress during the upheavals of the pandemic, also deserves enormous credit.

“As we move towards full project execution, it is a natural time for Chris to step into a new role and I’m pleased that we will benefit from his experience as he works with us on a number of strategic projects.

“I am delighted that Tom McCulley, currently CEO of Anglo American in Peru, who has so skilfully steered our Quellaveco copper project to a point of pre-commissioning, on time and on budget, will now lead the development of Woodsmith as CEO of our Crop Nutrients business.”